Vacant housing units constitute 14% of the total in Japan, with a global total of over 42 million such properties standing empty worldwide.
High Rural Vacancy Rates Pose Challenges in Japan and Beyond
A new study by the Organisation for Economic Co-operation and Development (OECD) has highlighted the issue of vacant housing, particularly in rural areas, as a significant concern in numerous countries. In Japan, the vacancy rate in rural and suburban areas is a long-standing issue, with about two-thirds of vacant housing located in these regions.
The high vacancy rate in rural Japan compared to urban areas is primarily due to population decline and weak housing demand in rural regions. Many rural homes are left vacant or abandoned as younger populations migrate to urban centers for employment and other opportunities, leaving behind aging and shrinking communities. This trend is exacerbated by the fact that many rural houses are neither rented out nor sold, often becoming neglected or abandoned properties.
The national vacancy rate reached about 13.8% in 2023, with nearly 3.85 million houses abandoned, up 1.8 times from 2003. The inheritance system in Japan does not help reduce the number of vacant houses as heirs often prefer to leave the houses abandoned.
The potential consequences of this high rural vacancy include maintenance challenges, economic impact, and social consequences. Vast numbers of unattended and aging homes cause increased maintenance difficulties, potentially leading to hazards like fires or structural collapse. The shrinking populations diminish local economies, leading to reduced consumer demand and tax revenue, exacerbating regional economic decline and hampering investment in infrastructure or innovation. Declining rural communities can face erosion of public services and social cohesion, intensifying urban-rural disparities and impacting overall societal stability.
Japan is followed by Cyprus and Hungary, with more than 12% of vacant housing in each country. Among the 20 countries studied by the OECD, 10% of housing is empty, representing 42 million housing units across Asia-Pacific, Europe, and America. The United States has more than a third of the vacant housing in the study, with 15.5 million unoccupied residences, representing 11% of the country's housing stock.
In the United States, there would be enough vacant housing to stop building new housing for about 12 years, according to construction rates from 2018 and 2019. Only Portugal has recorded a slightly higher vacancy rate in urban areas than in rural areas. England, Iceland, and Switzerland have less than 2% of unoccupied housing.
The OECD released data in May 2021 showing that 13.6% of housing in Japan is vacant permanently. In Japan, there are approximately 8.5 million vacant housing units out of the 62.4 million homes. The study also found that the housing supply in rural areas is sufficient for more than 6 years of construction, while it is sufficient for less than 6 years in urban areas.
The issue of vacant housing is not unique to Japan. Cyprus' vacant housing issue is linked to the militarized zone of Varosha, once a tourist destination. Brazil is the third country with the most vacant housing behind Japan.
Addressing the issue of vacant housing is crucial to revitalizing rural communities and promoting sustainable development. Solutions may include implementing policies to encourage the rental or sale of vacant properties, investing in infrastructure and public services to attract younger populations, and promoting rural tourism to boost local economies.
Investing in the renovation and re-purposing of vacant rural properties in Japan could present opportunities for those interested in real-estate, given the large number of abandoned homes. The high vacancy rate in rural Japan, coupled with the growing interest in sustainable development, necessitates creative financing solutions to revitalize these communities, such as government incentives for property investors.
